Monday, July 7, 2014

USDA Expects Record Corn Crop

Two years removed from a devastating drought that damaged crops and sent prices surging, farmers will see yields rise 4.1 percent to an all-time high of 165.3 bushels an acre, government data show. Rising grain output in the U.S., the world’s largest producer, is keeping global food prices in check while boosting profit for meat producers including Tyson Foods Inc. and makers of sweeteners and ethanol including Archer-Daniels-Midland Co. (ADM).
Futures have tumbled 21 percent since the end of April on the Chicago Board of Trade, slipping into a bear market on July 3. Prices today reached $4.0725, the lowest since Jan. 10. The Bloomberg Commodity Index of 22 raw materials dropped 3.5 percent over the same period, while the MSCI World Index of equities advanced 4.4 percent. The Bloomberg Treasury index gained 0.3 percent.
Corn’s slump may worsen once the harvest starts. In separate reports, Goldman Sachs Group Inc. said June 23 that prices will drop to $4 in six months, while Rabobank International said July 1 the grain will average $4.07 in the fourth quarter. Dan Basse, the president of AgResources Co. in Chicago, predicted a drop as low as $3.50.
As of June 29, 75 percent of the crop was in good or excellent condition, compared with 67 percent a year earlier and the highest at this stage of development since 2003, the U.S. Department of Agriculture said. After low temperatures delayed planting this year, the arrival of warm, wet weather accelerated plant development in June with about 5 percent already reproducing this week, up from 3 percent in 2013.
Most of the corn around here looks very good, but some of the corn that went into wetter soils looks pretty ugly.  A couple more decent showers and most of this corn will be made.  If we see $3.50 on the board, things are going to get pretty ugly for folks around here.

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